Below is a list of 8 actions we believe business owners should evaluate during this current crisis in order to minimize business challenges down the road.

1. Wellbeing of Your Employees Determine how/if your employment policies have addressed work from home scenarios, business interruption, etc. Work with your HR advisor to create action plans to address sick leave, layoffs, furloughs, union employee rights, etc. Understand HIPPAA compliance and other privacy concerns in releasing information related to positive COVID-19 situations. As always, you should consult with your legal counsel before implementing major policy changes.

Review the newly approved Family First Coronavirus Act (FFCRA) and understand what your requirements are and what help FFCRA can provide to help both your business and employees get through this. The law requires cash payments to employees for paid sick leave under certain conditions (click here for additional details). 100% of the wages paid to employees that qualify under the FMLA and paid sick leave requirements will be returned to employers in the form of a payroll tax credit.

2. Create a New Budget – Many of you create annual budgets anticipating sales, operating expenses and cash flow. It’s time to adjust them based on where the Company is today. Many things to consider are the impact on sales and collections. Maybe you are in an industry that is not experiencing much of a downturn but think of your customers, what are they experiencing.? If sales and cash flow are expected to be seriously affected, look at your costs. What are your fixed costs that occur even if you are shut down? What are ‘non-essential’ costs that can be eliminated entirely? What will you need to survive and for how long? When some federal and state aid is forthcoming this is going to be the measurement of what you can ask for and possibly receive.

3. Review Loan Obligations – Since banks are in a much better financial position than they were in the last recession they are going to, possibly, be able to help. They may have the ability to defer payments, extend maturity dates or go to interest only. Also discuss with them the possible of not meeting already defined loan covenants.

4. Review Insurance Policies – Business interruption and other insurance policies vary, and you need to know what is covered. Review policies to determine the scope of coverage, including potential claims for business interruption, losses, workers’ compensation, contamination and employment practices.

5. Reach out to your Key Customers – You must know the financial stability of your customers. Perhaps you will be able to extend credit terms but in worst case understand when and how you are going to get paid. Are there any ways you can mutually work with them to assist both sides – perhaps considering discounts for early payment.

6. Reach out to your Key Vendors and Review Contracts You will not be able to operate without a solid supply chain. Perhaps you can adjust your payment terms. Some vendors may consider reducing or deferring monthly payments to allow you to get through this.

7. Embrace Technology– While not an option for all businesses, consider if you can still carry on with some aspects using enhanced technology. There are a variety of technology tools available that you can use to work remotely with both clients and employees (i.e. Zoom, Microsoft Teams, Slack, etc.) Consider if there are any services you can provide to customers under remote work conditions. Are there certain tasks that you can assign to employees to focus on now? While you may not be at your peak performance, 50% productivity is still better than zero.

Sadly, while your business operations may have slowed down or stopped altogether, cyber criminals have not stopped. As always, you need to be vigilant with your technological security and protect yourself against hackers who may be looking to take advantage of the current situation.

8. Government Aid Options

a. SBA Disaster Loan Assistance – SBA provides low-interest disaster loans to businesses of all sizes, private non-profit organizations, homeowners, and renters. If you have suffered substantial economic injury and are located in a declared disaster area, you may be eligible for an SBA Economic Injury Disaster Loan of up to $2,000,000 with lower interest and loan terms of up to 30 years. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. However, keep in mind that taking advantage of the SBA loan assistance may preclude grants or other government assistance.

b. State and Local Disaster Assistance – In past state of emergency situations states and local governments have set forth programs. Keep abreast of possible assistance here as well.

c. Stay Alert for Tax Credits and Government Grants – Many lawmakers are saying that ‘help is on the way.’ Stay connected with WG for additional information as the latest legislation is enacted.

Questions? Ask a WG Advisor

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